Of course those are rumors and not much stock should really be placed in them, but according to 9to5Mac, they have unearthed some evidence that suggests that such an iPhone could indeed be in the works. This comes in the form of Display Zoom which seems to hint at a lower resolution that could be for the rumored 5.4-inch model.
For those who are unfamiliar, Display Zoom is a feature of iOS that makes text and icons bigger. This is done by lowering the resolution to the next smallest iPhone, so for example, when used with the iPhone XS Max and iPhone 11 Pro Max, the resolution is switched from its original to a 5.8-inch display resolution.
While this by no means guarantees that a smaller iPhone is in development, it does make a pretty compelling argument. Take it with a grain of salt for now, but we’ll have to wait until either September or October when the new iPhones are announced to get an official confirmation.